Tennessee SWC Asks CFTC to Ban Sports Event Contracts

The Tennessee Sports Wagering Council (SWC) has made its stance clear to federal regulators: it does not want to see financial trading platforms offering sports-based event contracts within the state. 

The CFTC, Urged to “Not Permit” Sports Event Contracts 

In a formal letter sent to the Commodity Futures Trading Commission (CFTC), the council urged the agency to “not permit” such offerings in the Volunteer State.

The letter, signed by executive director Mary Beth Thomas, does not carry the legal weight of the cease-and-desist orders issued by other states, such as Nevada, New Jersey, Ohio, Maryland, and Illinois. 

However, it signals Tennessee’s strong opposition ahead of a scheduled CFTC roundtable discussion on April 30, where the controversial topic of sports event contracts will take center stage.

While the debate unfolds in courtrooms in Nevada and New Jersey, with Kalshi recently securing a preliminary injunction against the Nevada Gaming Control Board, Tennessee’s involvement is currently limited to voicing its concerns through regulatory channels.

13 Reasons Why Sports Prediction Markets Are Unlawful

In its two-page letter to Acting CFTC chair Caroline Pham, the SWC outlines 13 ways that offering sports contracts through federally regulated trading platforms would violate Tennessee law. 

Among these, the council notes, is that anyone accepting wagers on sporting outcomes in the state must hold a license issued by the SWC. Without it, such activity is considered illegal.

The second half of the letter highlights specific consumer protections built into Tennessee’s sports betting laws and regulations, many of which would be sidestepped by platforms operating outside state oversight. 

These include a strict age requirement that says no one under 21 can legally place a bet, along with prohibited categories of individuals who cannot participate in wagering,
mandatory responsible gaming features, including self-exclusion options, and a ban on the use of credit cards and cryptocurrencies for betting accounts.

Other consumer protections mentioned in the letter include prohibitions on kiosks for account access or creation, state-level anti-money laundering protocols, and restrictions on bets involving college athletes’ injuries, penalties, or in-game props.

The SWC argues that these protections, crafted by lawmakers and enforced by the Council, would be undermined by CFTC-regulated entities offering similar products without adhering to state rules.

With the issue heating up nationally, Tennessee’s letter adds another voice to the growing opposition to financial markets’ involvement in sports gambling, at least in ways that bypass state licensing and regulation.